#789: Stablecoins Are Replacing the Petrodollar with Michael Every

— Michael Every outlines a "reverse perestroika" thesis: the Western geopolitical and macroeconomic order of the past 45 years is collapsing, requiring fundamental realignment across military, financial, and trade structures simultaneously.

— Energy scarcity—particularly diesel and refined products—is now a structural inflation driver due to wars in Ukraine and Iran; this cannot be resolved by rate hikes alone, only by geopolitical settlement or military victory.

— The Trump administration is pursuing "economic statecraft" to rebuild a Western bloc with selective alliance (Western Hemisphere, key energy partners) rather than maintaining global integration; this includes equity stakes in critical-mineral and defense companies to signal private-sector direction.

— Stablecoins and digital currency could become the successor to the petrodollar, replacing the eurodollar system; if backed by Treasury bills and geopolitically enforced, they might generate trillions in funding for infrastructure and military spending.

— China faces hidden structural crises—mass automation driving unemployment, negative-return manufacturing subsidies, worse fiscal fundamentals than the US—despite superior physical/energy infrastructure; the US lacks financial leverage against it due to China's self-sufficient trade fortress.

— Europe is geopolitically caught between the US and China with minimal leverage; October negotiations with China on trade deficits will be a critical test of whether the EU can mount credible resistance.

— Monitor energy prices (Brent, WTI, diesel crack spreads) and geopolitical flashpoints (Iran, Ukraine, Hormuz, Baltics) as primary inflation indicators; traditional Fed policy tools are subordinate to hard-commodity supply and military outcomes.

— Watch stablecoin adoption velocity and regulatory clarity (Genius Act, Clarity Act) as a leading indicator of whether the US can execute a dollar-system redesign; success requires rapid critical mass and state enforcement (trade conditionality, sanctions alignment).

— Expect executive-order escalation and political polarization to intensify regardless of midterm outcomes; plan for 10–16 years of economic reorientation and heightened volatility rather than near-term resolution.